Turkey to use behavioral economics in policymaking

Turkey's economy minister launched on Monday the country's first behavioral economics project which uses psychology in the analysis of economic decision-making.

"The first official department for developing behavioral public policies has been established in the Economy Ministry. We will develop policies for all of Turkey," Nihat Zeybekci said at the launch of the project in Ankara.

Zeybekci noted that the Nudge Turkey project was developed before U.S. academic Richard Thaler won the 2017 Nobel Economic Prize for his contributions to behavioral economics.

"It was a good coincidence," he said.

The ministry has been working on Nudge Turkey since 2015. The project is conducted by the Economy Ministry in partnership with the British Embassy, EY Turkey and London-based Behavioural Insight Team.

"I think the U.K. has a good experience in this field and we will benefit from it," Zeybekci said.

The British ambassador to Ankara, Richard Moore, said the U.K. made use of behavioral science in economy policymaking.

"We aim to support Turkey's economic reform program with this project," he said.

Moore underlined the significance of affecting behavior for public policies, adding behavioral insights might help develop new and lower-cost policies than the policy instruments currently in use.

The ambassador said that the U.K. set up in 2010 the Behavioral Insights Team which consists of psychologists, policymakers and economists.

"They use outcomes of behavioral economics and social psychology in order to develop public policies," he explained.

"To be honest, we can say that the U.K. is the world leader in this regard. I hope that this project will further our cooperation and we will learn from each other's experiences," he said.

Muhammed Emin Torunoglu, a foreign trade expert with the Ministry said that the behavioral theory claimed to guide people's decision-making mechanism with various psychological elements.

Changing just one line in a tax collection letter can increase the rate of collection by 12 percent, he said.

"For our country, even an increase of 1 percent in tax collection might provide an additional revenue of 6.5 billion Turkish liras ( $1.6 billion)," he added.